Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Direct Loan Update

PublicationDate: 1/11/96
Summary: Direct Loan Update
Author: DLTF - Direct Loan Task Force



Jan 11

--------------
DIRECT LENDING
-------------- The week after Thanksgiving, Secretary Riley
published in the Federal Register 3 new sets of final
regulations for the Direct Loan program. They're designed
to 1) revise the program's income contingent repayment
option to discourage overborrowing & encourage repayment, 2)
improve the program's fiscal & administrative oversight, and
3) establish safeguards against excessive defaults at
participating schools. Among other changes in the income
contingent repayment option, the Department simplified the
existing repayment calculation provisions, made the
repayment plan more sensitive to family size & total amount
of debt, & eliminated the discrepancy between married &
single household heads when determining monthly payment
amounts. The new regulations will take effect July 1, 1996.

The Direct Loan program was the focus of a November 30th
White House press conference to reiterate the
Administration's commitment to direct lending in the federal
budget reconciliation negotiations. Deputy Secretary Kunin
represented the Department at the event, which also featured
remarks by the presidents of American University, the
American Council on Education (ACE), the National
Association of Independent Colleges & Universities (NAICU),
the American Association of State Colleges & Universities
(AASCU), & the United States Student Association (USSA).

Last Modified: 08/16/1999